Bankless 130 - How to Fix DeFi Tokens | Hasu
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Aug 1, 2022 Hasu, a crypto-economic researcher at Paradigm and strategist at Flashbots, dives into the complexities of DeFi tokens and DAO governance. He discusses the urgent need for improved governance structures to protect investors and recover from market downturns. Hasu explores the disconnect between protocol success and token stagnation, regulatory concerns, and the alignment of interests within DAOs. With insights on treasury management and the application of traditional business principles, he offers pathways to more effective decentralized governance.
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Broken DeFi Tokens
- DeFi protocols like Maker and Uniswap function well, but token value accrual is disappointing.
- This suggests DeFi tokens might be broken regarding value capture for investors.
DeFi Lending vs. CeFi Lending
- DeFi protocols primarily offer over-collateralized lending, unlike CeFi lenders who engage in unsecured lending.
- This explains why DeFi performed better during the recent credit contraction.
Treasury Management
- DAOs should manage treasuries like businesses, ensuring sufficient liquidity for bear markets.
- Many protocols mismanaged treasuries, leading to reduced headcount and fundraising at low prices.